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Federal Budget 2026: What the changes mean for home buyers and property investors.

  • The 2026–27 Federal Budget, delivered on Tuesday 12 May by treasurer Jim Chalmers, focuses on making the tax system fairer for young Australians with an overhaul of the rules for negative gearing and capital gains tax.

In summary:

Here’s everything we know about the proposed tax changes and how it may impact you, depending on your circumstances.

Note: These changes are proposed and will need to pass Senate. The final details may shift during the legislative process.

I already own an investment property.

  • Capital Gains Tax (CGT): A split system will be applied when the time comes to selling your property. Any capital growth prior to 1 July 2027 will remain eligible for the existing 50 per cent CGT discount. Gains accrued from 1 July 2027 onwards will be calculated using the proposed cost-base indexation method, with a 30 per cent minimum on all new gains.

    MyChoice Home Loans General Manager John Berghella says “There are some partial exemptions to the new cost-based indexation method for pensioners, people on income support and those who purchased property before 1985.”

  • Negative Gearing: Since your property is ‘grandfathered’, meaning those already negatively gearing established properties can continue to do so, without any changes. If you own the property, you can continue to claim rental losses against your salary and other sources of income.

I’m looking to invest in an established home.

  • Capital Gains Tax (CGT): From 1 July 2027, the 50 per cent discount will be replaced by a discount based on inflation, and a 30 per cent minimum tax will apply to all net capital gains.
  • Negative Gearing: You will still be able to claim any rental losses against all your income up until 30 June 2027. From 1 July 2027, you will no longer be able to deduct rental losses against any form of income with losses only to be used against residential income property. There is the option to carry forward losses to future years to deduct against residential property income.

I want to invest in a new build.

  • Capital Gains Tax (CGT): The choice is yours. You can use either the existing 50 per cent CGT discount or the new cost-base indexation method with the minimum 30 per cent tax.

    John Berghella says, “investing in a brand-new home build could be a financial sound and savvy option for investors, giving them the option to select whichever offers a better tax outcome.”

    As Construction loan specialists, building a brand-new home is simple with a land and construction loan backed by expert advice and ongoing support. Chat to our team today to discuss your construction loan.

  • Negative Gearing: Like those who already own an investment property, there will be no changes with investors having the ability to fully deduct rental losses against their salary and other income.
    I’m a first home buyer planning to live in my home (owner-occupier).

  • Capital Gains Tax (CGT): The main residence exemption is unchanged. Owner-occupiers will not pay any capital gains tax when selling the property.

  •  Negative Gearing: This is not applicable to owner-occupier properties.

  • Deposit Help: The expanded 5 per cent Deposit Scheme continues to be available, helping first home buyers purchase a home with a smaller deposit and no Lenders Mortgage Insurance (LMI) fees. Learn more here.

What to consider from here.

At this point, these are just proposed changes and will need to pass the Senate. Whilst this year’s Budget highlights the Government’s stated direction, the final details may shift during the legislative process.

This budget has been designed to benefit first home buyers, projecting 75,000 homes will change hands from investors to first home buyers with the proposed changes to capital gains tax and negative gearing. This combined with the 5 per cent Deposit Scheme, will help make entering the market for achievable for young Australians.

If you already own an investment property acquired before Budget night, your current arrangements are protected.

However, for anyone considering a property purchase or investment, the decision to choose between new or established housing is now a more meaningful factor in the financial equation. Make the sensible step forward and speak to MyChoice Home Loans about investing in your future today.

Disclaimer: This article is intended as general information only and does not constitute financial, tax or legal advice. Please seek independent professional advice before making any financial decisions.

Fast-track your path to buying a home.

Imagine unlocking the door to your very own home, sooner than you ever thought possible. With the Australian Government’s 5% Deposit Scheme, aspiring home buyers just like you can finally achieve that dream! 

Whether you’re starting out or starting over, the 5% Deposit Scheme (previously known as Home Guarantee Scheme) means you can secure a cosy townhouse, family home or vacant block of land with a minimum 5% deposit with no Lenders Mortgage Insurance.  

Key Features and Benefits.

  • Low deposit options: Minimum 5% for first home buyers.
  • No income caps: Support for all Australians, no matter your income.
  • No Lenders Mortgage Insurance: Save on upfront fees.
  • Wide choice of home types: Houses, townhouses, apartments, house/land packages, off-the-plan, or building on vacant land.
  • Government backing: A Government guarantee is provided to the lender for your loan.
  • Unlimited spots and no waiting list: Apply when you’re ready.

How do I secure a spot in the scheme?

John Berghella, General Manager at MyChoice Home Loans says, “Securing a spot in the 5% Deposit Scheme is very similar to the pre-approval process with a lender, meaning you don’t need to have a land or build contract already. By applying, your space will be reserved for up to 90 days, and if this lapses, you can apply again.”   

  1. Check your eligibility here or read the information guide.
  2. Contact MyChoice Home Loans who’ll assess your eligibility, guide you through loan options and submit your application.
  3. Search for a home! Once approved you’ll have up to 90 days to sign a contract of sale.
  4. Buy your home and move in. Once a contract of sale is signed your lender will manage final approvals. Congratulations you’re a homeowner! 

What lenders are participating in the scheme?

There are over 30 authorised lenders across Australia, making home ownership more achievable. 

Working alongside MyChoice Home Loans, we’ll remove all the stress and do the hard work of finding the perfect lender and loan that suits you

Am I eligible?

You need to meet the below criteria:

  • You are a first-time buyer or have not owned a property in 10 years or more.
  • You intend to purchase an existing home or build a brand-new home.
  • You intend to live in the home (principal place of residence).
  • You are not purchasing as an investment property, or are purchasing on someone’s behalf.
  • You are an Australian citizen or permanent resident.

For more detailed information on how you can meet these eligibility prerequisites, seek advice from government resources or speak to our finance specialists at MyChoice Home Loans.

Are you building a new home?

Building your brand-new home is so much easier with a land and construction loan backed by expert advice and ongoing support. 

As construction home loan specialists, the team at MyChoice Home Loans will partner with you along every step of the building journey. From the initial conversation, MyChoice Home Loans offers convenience, choice, and clear information and communication giving you peace of mind throughout the entire build journey. 

Plus, we’ve created specific home loan products that are exclusive to builders proudly supported by the NEX Building Group, which could potentially save you thousands. 

We’ll work towards getting your loan approved faster and continue to provide support throughout the entire life of your loan, so that you can feel confident and relaxed knowing your finances are taken care of.

Take the leap.

Ready to apply? Chat to your local MyChoice Home Loans consultant today. With offices in NSW, ACT, QLD, VIC, TAS and SA we cannot wait to help you achieve your home ownership dreams in 2026

 

What is home equity? Part 2

In Part 1, we discussed what is home equity, how to calculate your equity and 5 things to consider before you use it. Keep reading Part 2 to discover how you can use equity to purchase an investment property. 

How can I use equity to buy a second home?

Aside from refinancing, there are a few other options available to you that can give you access to your homes equity for the purpose of buying another property. Before getting started, it may be wise to use a few tools – like our MyChoice Home Loans financial calculators – to wrap your head around the borrowing power, how much it will cost to buy an investment property, as well as other resources like budget planners and stamp duty calculators.

Line of credit

Using equity through a line of credit is a common strategy for property investors. It’s a way for homeowners to access funds up to a predetermined limit based on the equity in their property. By going down the line-of-credit route, you can secure the necessary loan amount for a deposit of your second home.

Reverse mortgage

If you own your primary residence outright or have substantial equity, a reverse mortgage may be an option. This strategy means you can convert a portion of your home equity into cash, which can be used for property investment. The existing home loan is repaid when the borrower moves out, sells the home or passes away. Reverse mortgages are, however, subject to tight lending criteria, so speak to your local MyChoice Home Loans consultant or bank about whether this is a viable option.

Cross-collateralisation

Cross-collateralisation uses the equity in your existing home loan as collateral for the loan on your second house. It’s a financial strategy that ties both properties together. While this can make the loan process more streamlined, it also means that any default on one property will negatively impact the other.

Can I use equity to buy a house with no deposit?

The equity from your home is what can be used as a deposit for a second property. In other words, if you have enough equity in your existing home, then you can use this amount as the deposit for your new investment property – with many lenders allowing you to borrow up to 95% LVR on your own home and 90% on an investment property.

How does using equity to refinance affect my current home loan?

Refinancing with your equity involves replacing your existing home loan with a new one, often with better terms. Drawing on how each equity you have during refinancing can be a smart way to get additional funds. However, you’ll want to factor in any impact to your existing loan. While it can increase the overall debt secured by your property, it may also result in lower interest rates or better loan terms.

Make sure to speak to one of our MyChoice Home Loans consultants or tax professionals to make sure that any refinancing decisions you make align with your overarching financial goals and won’t jeopardise your current loan structure.

How to increase your home’s equity

Looking to build up your home’s equity so you can leverage more funds for a cash deposit on future investments? Here’s a few strategies to consider:

·       Home improvements: Improve the value of your home through strategic home improvements, renovations, extensions and more.

·       Market appreciation: Monitor market appreciate on homes in your area by staying informed about current trends.

·       Additional loan repayments: You may be able to make extra mortgage repayments to built equity in your home faster. Just make sure you won’t be financially penalised.

·       Maintain your property’s condition: Regular home maintenance and upkeep will help to preserve the value of your existing home.

·       Energy-efficient upgrades: You might consider investing in energy-efficient upgrades – such as solar panels or EV charging batteries that lower your utility bills while also making your property more attractive to buyers (and therefore more valuable).

Tips for investing in property

 

Investing in property can be a lucrative strategy – but only when done with plenty of research, professional advice and careful consideration. Before jumping into property investment, make sure you research local markets, consider long-term market trends, get tax advice from an expert or do your due diligence of using equity to buy.

What is home equity? Part 1

Home equity is a financial asset tied to your home – and one that can be used to your advantage in a few exciting ways. Beyond investing in your future, the equity you build up in your home can become a pool of potential value.

In simple terms, home equity is the difference between your homes market value and what you still owe on it. As your pay down your mortgage over the years, the equity builds up. It’s a big part of home ownership – but something that’s often overlooked. Here’s what you need to know about the basics of home equity, as well as how you can use it to potentially grow your wealth and property portfolio.

What is equity in a property?

Equity is a measure of your property ownership as it represents the ‘portion’ that belongs to you. It’s the difference between the market value and the outstanding mortgage balance. As you pay down your mortgage or your home appreciates in value, your equity goes up. Moreover, useable equity (also referred to as accessible equity) is the amount you can leverage for various purposes.

What can equity be used for?

You already know that you can use equity in your current home to invest in another property. But what you might not realise is that it can actually be used for a number of other things.

One common application is improving your home – using equity to renovate or upgrade your property can make a big boost to its overall value. Equity can also be an effective resource for financing major life events, such as a dream holiday or buying a new car.

One big advantage is that the interest rates on home equity loans or lines of credit are often lower than other forms of credit, resulting in long-term cost savings. Whether you’re looking to consolidate high-interest debt, invest in your kids’ future education, or fund a large purchase, tapping into your property’s useable equity can be a cost-effective strategy.

How can home equity help?

Taking advantage of your home equity to buy a second property can be a strategic financial move with several benefits:

·       It provides the means to expand your real estate portfolio, potentially growing your overall wealth and setting you up for a more comfortable retirement.

·       Using home equity for a second property can offer a few tax advantages, as mortgage interest payments could be tax-deductable in some circumstances.

·       By diversifying your investments, you are essentially ‘spreading out’ your level of financial risk across multiple assets.

·       Using the equity in your existing property means you can access better terms compared to other forms of credit. In other words: lower interest rates.

How to calculate home equity

Calculating the equity of your home is straightforward and involves subtracting your outstanding mortgage balance from the current market value of your property. Because property values tend to fluctuate, keeping an eye on your home loan equity is necessary when you are preparing to use it.

Start by getting an up-to-date property valuation, either through a professional appraiser or by using online property-valuation tools. Once you have this figure you can use the following calculation:

Home value – outstanding mortgage = equity

For example, if your property is valued at $1,000,000 and your outstanding mortgage is $800,000, your equity is $200,000.

5 things to consider before using your equity

1.      Interest rates: Do a bit of research into the interest rates that come with using your home equity and how they compare to other financial options.

2.      Loan terms: Always read the terms and conditions of equity-based loans, including repayment schedule and potential penalties for missed payments.

3.      Property value trends: What’s happening right now in the current property market? Consider the current and future trends of property values, as they might impact your decision to borrow additional funds.

4.      Your financial situation: Assess your overall financial stability to make sure you are matching your home-equity plans with your long-term financial goals and risk appetite.

 

5.      Impact on loan-to-value (LVR) ration: Find out how using your equity might affect your loan-to-value ratio. This can influence your eligibility for certain loans and lower interest rates.

To keep learning about home equity and how it can benefit you and your family, read part 2.

 

 

Can I use my super to build a house?

If you’ve been trying to achieve the great Australian Dream of home ownership but are struggling to build a sizeable deposit, there are some alternative ways to do it. If you’ve ever wondered whether you can leverage your retirement savings for something other than retiring, you’ll be happy to know you can now use your superannuation to build a house.

Here’s what you need to know to build a new home or buy house and land using your super – plus the potential pros and cons to consider.

Ways to build or buy property using your superannuation

You don’t need to be in your golden years to enjoy all the wealth you’ve accumulated in your superannuation account. On the contrary, the Australian government has made it easier than ever to put those before-tax contributions to good use in a number of different ways.

1.     First Home Super Saver (FHSS) Scheme

The First Home Super Saver (FHSS) Scheme allows eligible Australians to make voluntary contributions into their super to save for their first home. You can then apply to release these contributions, along with other earning, for your home deposit, provided you meet the eligibility criteria.

As with all government schemes, there are limits to the amount you can contribute and withdraw under the FHSS. That’s why you’ll need to stay across the latest guidelines from the Australian Tax Office (ATO), as well as speak to a financial advisor or tax agent to ensure any decisions you make are compliant under the scheme.

How does the First Home Super Saver Scheme work?

·       Voluntary contributions: If you are eligible, you can made additional voluntary contributions to your super fund, which are then earmarked under the FHSS scheme. These contributions can be salary sacrifice contributions or personal after-tax contributions for which a tax deduction is claimed.

·       Contribution limits: There are annual and total limits on the contributions you can make under this Scheme. For the 2024-25 financial year, for example, the maximum contributions allowed are $15,000 per financial year and $50,000 in total.

·       Request for release: Once you’ve made the contributions, you can apply to release these funds along with any other associated earnings to help fund your first home.

·       Eligibility criteria: To be eligible, you need to meet certain criteria, including being 18 years or older, never having owned a property in Australia and intending to live in the property as soon as possible.

·       Tax benefits: Contributions made under the FHSS scheme receive concessional tax treatment within your super fund. When released, the taxable portion is subject to a lower rate compared to your marginal tax rate.

·       Withdrawal process: After applying for a release, the ATO determines the amount that can be released and will instruct your super fund to make the payment. You will then need to sing a contract to begin the buying or building process within 12 months.

2.    You’ve reached preservation age

Are you a retiree looking to downsize into a brand new home in your dream location? You’re in luck!

Once you have reached what’s known as ‘preservation age’, you can access your superannuation for any reason. For most people, that means you’re in your 60s and retired, or after you turn 67 – even if you are still working.

With the funds you’ve accumulated in your super over decades of working, you can pour everything into finding the perfect plot of land and building the home of your dreams.

5 Benefits of accessing your super to build a house

1.      Access to helpful schemes: You can now access your super to build a house thanks to the FHSS scheme, which may also come with tax advantages and help you save for your first home.

2.      Tax benefits: Contributions made under the FHSS are taxed at a lower rate, which translates to potential tax savings compared to standard super contributions.

3.      Become a homeowner faster: Using your super can speed up your journey to homeownership, especially for first-time buyers.

4.      Personalise your dream home: Building a home rather than buying an existing property means you can customise your home to meet your lifestyle needs and tastes.

5.      Start building a portfolio: Directing your super toward property investment will diversify your portfolio and finally put you on the property ladder – with the potential for a long-term capital growth and financial security ahead.

3 potential negatives of using super to build a house

1.      Less for your retirement savings: Drawing from your super to build a house can dimmish your retirement savings. This may impact the overall nest egg you are planning to rely on during retirement.

2.      Impact on compound growth: The compounding effect of superannuation can be huge over several decades. Early withdrawals may interrupt this compounding growth and limit your potential wealth at retirement.

3.      Strict eligibility: Accessing your super to build a house involves meeting strict eligibility criteria.

Bring your dream home to life

 

Start making your super work for you – even before you hit retirement age – by using it to fund your dream new home. When you build with any home builder part of the NEX Building Group you will have exclusive access to MyChoice Home Loans. Our team will put you in the best lending position when we call on our relationships with some of Australia’s leading lenders. Why not use our borrowing capacity calculator to understand exactly where you are on the journey towards homeownership.  

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Norwest, NSW 2153
PO Box 7994, Baulkham Hills, NSW 2153

North Coast

Shop 3, 145 Horton Street
Port Macquarie, NSW 2444

ACT

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Corner Gladstone St & Tennant St
Fyshwick, ACT 2609

Hunter Region

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Thornton NSW 2322
PO Box 340, East Maitland, NSW 2323

VIC

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Scoresby, VIC 3179

QLD

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Loganholme, QLD 4129
PO Box 3220, Loganholme, QLD 4129

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Oak Flats, NSW 2529
PO Box 275, Oak Flats, NSW 2529

SA

45 Richmond Road
Keswick SA 5035

TAS

156 New Town Road
New Town, TAS 7008

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